A US court has approved Limerick-based Nordic Aviation Capital’s restructuring plan which the company hopes will allow it to exit bankruptcy proceedings in May.
The US bankruptcy court for the state of Virginia on Tuesday upheld a plan that will reduce Nordic Aviation Capital’s (NAC) total outstanding debt by $4.1 billion (€3.8 billion).
This was followed at the end of last week by the overturning of a last-minute appeal by the US tax authorities.
NAC has been trying to get out of less than $6.3 billion (€5.8 billion) in debt by passing it on to lenders.
The restructuring plan provides for an infusion of nearly $540 million in new capital through a $337 million capital injection and $200 million in new revolving credit facilities.
It will also extend the maturities of existing funded debt and see the orderly exit of certain groups of creditors from NAC.
NAC said in a statement that the plan will maintain the company’s position as “one” of the world’s largest lessors with “over 350 aircraft on lease.”
President and Chief Executive Norman Liu said the company is “ready” to complete bankruptcy proceedings by the end of May and emerge as “a well-capitalized company with the flexibility and resources to position us for recovery and growth.”
“With today’s confirmation, we have reached a significant milestone for NAC,” said Vice Chairman Justin Bickel, who also chairs the firm’s Restructuring Committee.
“This important step represents the successful culmination of a lot of hard work by many stakeholders, including months of constructive negotiations with our supporting creditors.”
Before the restructuring, NAC was the world’s largest lessor of regional aircraft with over 500 aircraft leased to airlines such as Germany’s Lufthansa, Portugal’s TAP and Air Frances Hop.
The landlord has been hit hard by the pandemic, posting a massive $1.2 billion loss last December alone, according to US court filings.
It posted losses of nearly $2.4 billion for the year ended June 2021.
NAC began its bankruptcy proceedings on Dec. 19 after reaching an amicable settlement with lenders who hold more than 73% of the lessor’s $6.3 billion debt.
The agreement was approved by over 99 percent of the voting creditors, NAC said.
Under the Chapter 11 procedure, the reorganized entity would be majority-owned by its largest creditors.
Chapter 11 protects businesses from creditors and businesses during debt restructuring.
Unlike the investigator process in Ireland – which could have been an alternative for NAC – companies filing for Chapter 11 bankruptcy do not have to be insolvent to use the process, making it more attractive in some cases.
Nordic said in December that its restructuring plan “will place the company in a strong financial position to continue its global operations” and that it will “continue to substantially honor all of its commitments to employees, customers and suppliers.”
https://www.independent.ie/business/irish/nordic-aviation-capital-to-exit-us-bankruptcy-process-in-may-after-restructuring-41569383.html Nordic Aviation Capital exits US bankruptcy proceedings in May after restructuring